1. In the context of food and nutritional security of India, enhancing the
‘Seed Replacement Rates’ of various crops helps in achieving the food
production targets of the future. But what is/are the constraint/ constraints
in its wider/greater implementation?
1. There is no National Seeds Policy in place.
2. There is no participation of private sector seed companies in the supply of
quality seeds of vegetables and planting materials of horticultural crops.
3. There is a demand-supply gap regarding quality seeds in case of low
value and high volume crops.
Select the correct answer using the code given below.
(a) 1 and 2
(b) 3 only
(c) 2 and 3
(d) None

Ans. (b)
We have a National Seed policy made in 2002. So 1 is not a constraint. The
private sector produces high-priced seeds but in lower volume. It supplies nearly
the entire hybrid seeds required for vegetables. So 2 is not a constraint. In the
case of low value and high volume crops such as wheat and rice, farmers tend to
use their own preserved seeds as there is demand and supply gap. So 3 is a

2. Which of the following organizations brings out the publication known as
‘World Economic Outlook’?
(a) The International Monetary Fund
(b) The United Nations Development Programme
(c) The World Economic Forum
(d) The World Bank

Ans. (a)
World Economic Outlook (WEO) is a survey conducted and published by
the International Monetary Fund. It is published biannually and partly
updated two times a year. It portrays the world economy in the near and
medium context, with projections for up to four years into the future. WEO
forecasts include key macroeconomic indicators, such as GDP inflation,
current account and fiscal balance of more than 180 countries around the

3. Which of the following are associated with ‘Planning’ in India?
1. The Finance Commission
2. The National Development Council
3. The Union Ministry of Rural Development
4. The Union Ministry of Urban Development
5. The parliament

Select the correct answer using the code given below.
(a) 1, 2 and 5 only
(b) 1, 3 and 4 only
(c) 2 and 5 only
(d) 1, 2, 3, 4 and 5

Ans. (c)
If we take Central Planning process in view the Parliament is associated through
the MPLADS while NDC is part of the process. Planning commission is
collaborating the Finance Commission since 2000 bu the later is not considered
associated to the planning process. The Union Ministries given in the choices
were never given seats in the PC.

4. The main objective of the 12th Five-Year Plan is
(a) inclusive growth and poverty reduction
(b) inclusive growth and sustainable growth
(c) sustainable and inclusive growth to reduce unemployment
(d) faster, sustainable and more inclusive growth

Ans. (d)
Explanation: Self Explanatory

5. If the interest rate is decreased in an economy, it will
(a) decrease the consumption expenditure in the economy
(b) increase the tax collection of the Government
(c) increase the investment expenditure in the economy
(d) increase the total savings in the economy

Ans. (c)
Decreased interest rates would ensure availability of capital for investment

Also Read: Economics Questions for UPSC Prelims 2010 : Let’s crack UPSC Exam!

6. What does venture capital mean?
(a) A short-term capital provided to industries
(b) A long-term start-up capital provided to new entrepreneurs
(c) Funds provided to industries at times of incurring losses
(d) Funds provided for replacement and renovation of industries

Ans. (b)
Venture capital is financing that investors provide to startup companies and
small businesses that are believed to have long-term growth potential. For
startups without access to capital markets, venture capital is an essential source
of money. Risk is typically high for investors, but the downside for the startup is
that these venture capitalists usually get a say in company decisions.

7. The terms ‘Marginal Standing Facility Rate’ and ‘Net Demand and Time
Liabilities’, sometimes appearing in news, are used in relation to
(a) banking operations
(b) communication networking
(c) military strategies
(d) supply and demand of agricultural products

Ans. (A)
MSF came into effect from 9th May 2011. MSF scheme is provided by RBI by
which the banks can borrow overnight upto 1 percent of their net demand and
time liabilities (NDTL) i.e. 1 per cent of the aggregate deposits and other
liabilities of the banks.

8. What is/are the facility/facilities the beneficiaries can get from the
services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security
benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and
Select the correct answer using the code given below.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Ans. (c)
BCs are being used under the Swabhimaan scheme for both the purposes

9. In the context of the Indian economy, which of the following is/are the
purpose/purposes of ‘Statutory Reserve Requirements’?
1. To enable the Central Bank to control the amount of advances the banks
can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault-cash to meet their day-to-day

Select the correct answer using the code given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
Ans. (a)
A statutory reserve is an amount a cash financial institution, such as a bank,
credit union, or insurance company, must keep on hand to meet the obligations
incurred by virtue of accepting deposits and premium payments. The statutory
reserves required of banks and credit unions are generally set by the nation’s
central bank, and those required of insurance companies are set by statute or
regulation by the national, state or provincial government or regulatory
authority. Calculated in various ways, statutory reserves are required to ensure
that financial institutions are capable of paying claims even in a calamitous

10. The sales tax you pay while purchasing a toothpaste is a
(a) tax imposed by the Central Government
(b) tax imposed by the Central Government but collected by the State
(c) tax imposed by the State Government but collected by the Central
(d) tax imposed and collected by the State Government
Ans. (D)
The power to impose taxes on ‘sale of purchase of goods other than
newspaper’ belongs to State (Entry list 54, State II)

11. With reference to Balance of Payments, which of the following
constitutes/ constitute the Current Account?
1. Balance of trade
2. Foreign assets
3. Balance of invisibles
4. Special Drawing Rights
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3
(c) 1 and 3
(d) 1, 2 and 4

Ans. (c)
Current account includes balance of trade (exports-imports), net remittances,
Trade in services. SDRs count as foreign assets
12. With reference to the Union Budget, which of the following is/are
covered under Non-Plan Expenditure?
1. Defence expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies
Select the correct answer using the code given below.
(a) 1 only
(b) 2 and 3 only
(c) 1, 2, 3 and 4
(d) None

Ans. (c)
All of them form the part of Non-plan expenditure.

Also Read: Economy and Social Development UPSC Questions : UPSC CSE Prelims 2013 Question paper Analysis

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UPSC Prelims 2014 Economy Questions Analysis : Find the solved answers for UPSC preparation
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UPSC Prelims 2014 Economy Questions Analysis : Find the solved answers for UPSC preparation
Find the solved answers for UPSC preparation for UPSC prelims Economics questions.Help yourself during preparation of upsc and revise the questions for revision.
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